During his June African trip, President Obama announced a $7 billion American investment in energy projects in sub-Saharan Africa, but critics say that is not enough if the U.S. wants to be a real player in the region's energy future.
Obama said the program is not about American altruism. "If prosperity is broadly shared here in Africa, that middle class will be an enormous market for our goods," he said on June 30.
Critics argue, however, that the initial investment of $7 billion may not help the African economy as promised, pointing to the White House's own admission in a fact sheet that "sub-Saharan Africa will require more than $300 billion in investment to achieve universal electricity access by 2030."
Aniket Shah, a strategist at Investec, an asset management firm that deals with U.S.-African investments, called the initial venture a "drop in the bucket."
"It's an order of magnitude problem," Shah said. "Are there enough projects to put this money through?"
Some potential investors may lack confidence that their money will have a both impact and a return on investment.
Jay Ireland, CEO of GE's Africa division, said the initial investments, even if not paid back, are needed to lay the groundwork for an economic presence.
"There are plenty of projects but no money," Ireland said. "It's worth the risk. If you want to have development, you have to have the infrastructure for it."
The program also seeks to attract at least $9 billion in private investment from companies such as GE, Symbion Power and Heirs Holdings.
Selected countries for the initial run of Power Africa include Ethiopia, Ghana, Kenya, Liberia, Mozambique, Nigeria, Tanzania and Uganda.
"The administration identified the energy sector as an important factor for development to move Africa forward about a year ago," said Andrew Mayock, deputy vice president of compact operations at the Millennium Challenge Corporation, an independent U.S. foreign aid agency involved with Power Africa. He oversees Mozambique and Tanzania.
Mayock said that countries involved in the project had to go through a rigorous selection process and would undergo training to ensure that investments would be successful.
In the future, Mayock said American investments could extend to "$90 billion on infrastructure and $30 billion in energy infrastructure" to meet the gap Africans face in supply and demand of electricity.
Liberata Mulamula, Tanzanian ambassador to the United States, argues that an American investment in the African subcontinent is "not charity, not aid, but an investment with a big return."
"We have a country where only 21% have access to electricity," Mulamula said. "Our target is that by 2015, we reach 30% of our population."
Mulamula said that an American investment in the African energy sector is key to African livelihoods, particularly in poverty-stricken Tanzania.
"If we are able to get power, this will stimulate industries," she said. "How can you have industries without power? How can you have education without power? How can you do anything at home?"
Mayock called the $7 billion investment a "step in the right direction."
"You are getting more bang for your buck and leveraging your money," he said. The plan "recognizes that the gap remains. But it's a good first step."
Mulamula agrees.
"It is an ambitious plan only targeting a few countries," she said. "It's not enough money, but it's important money that has come at the right time."
